Question

You've just created and e-mailed the financial statements to your boss? What is the next step you should do in accounting cycle?

Perform a trial balance to check the statements
Creating a balance sheet
Close out the revenue and expense accounts
Adjusting entries for the next cycle

Answer 1

You've just created and e-mailed the financial statements to your boss. What is the next step you should do in accounting cycle? Close out the revenue and expense accounts. After the financial statements are prepared all nominal accounts which include the revenue and expenses, should be closed out to zero. This allows for the accounts to be at an even start for the next accounting cycle.